Vietnam is among the global emerging logistics market. However, because of weak infrastructure, the transport cost in total logistics fees is twice as other countries.

According to the World Bank, Vietnam ranks 64th out of 160 countries in logistics development level and fourth in ASEAN, after Singapore, Malaysia and Thailand.

According to Agility, in 2022, Vietnam ranked 11th among 50 emerging logistics markets around the globe. Vietnam’s logistics industry witnessed an average growth rate of 14-16 percent per annum, valued at $40-42 billion.

Elias Abraham, CEO of Zim Integrated Shipping, commented that the delivery, forwarding and import-export services all have great potential for growth in Vietnam.

More than 15 years ago, Vietnam did not have any service to carry goods to Europe and the US, but today there are more than 200 logistics service routes to the regions. 

However, he pointed out that vessels to Vietnam only go through central areas and main ports, so cargo has to go a long distance by road, which leads to high costs. There is no other choice for goods owners. It is necessary to pay attention to developing second- and third-class ports.

“Vietnam should focus on second- and third-class ports like the ones in Long An, Phu Yen and Quang Nam. The localities all have witnessed considerable growth. However, shipping firms don’t want to come to the areas because the infrastructure conditions are not good enough for them,” he said.

According to Pham Thi Bich Hue, president of Western Pacific, the transportation cost accounts for 60 percent proportion in total logistics costs, twice as much as other countries (just 30-40 percent).

This is attributed to weak infrastructure development planning and management by state management agencies, which is considered the biggest bottleneck. Meanwhile local infrastructure is not specifically designed to fit local conditions and fully exploit local strength.

Deputy director of the Import-Export Department under the Ministry of Industry and Trade (MOIT), Tran Thanh Hai, said that poor infrastructure is the big ‘knot’ that needs to be untied. That is why the government has accelerated investment in infrastructure, especially highways, seaports and railways.

Deputy Minister of Planning and Investment Tran Duy Dong said the transport infrastructure and logistics sector still cannot create a multimodal transport corridor, while the demand for high-quality transshipment of goods between modes is increasing rapidly. Vietnam lacks concentrated logistics in strategic positions synchronized with seaports, airports, roads and production bases.

The National Assembly has decided to spend VND2.87 quadrillion of the medium-term public investment plan on infrastructure projects.

Vietnam targets 3,000 kilometers of highway by 2025 and 5,000 kilometers by 2030.

Viet Nam Net